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Small Business Owners

Nan Warshaw, a small business owner in Chicago, discusses what the Affordable Care Act has done for her

Small business owners are often concerned about the cost of health care for their employees. Many provisions of the Affordable Care Act listed below are focused on allowing small business owners to offer health insurance to their employees in a cost effective way, including small business tax credits that owners may be eligible for right now.

Small Business Tax Credits

If you are a small business in Illinois offering health coverage, you may be eligible for tax credits right now. For more information on these tax credits, you can visit the Department of Insurance website.

Protection Against Premium Increases

Small businesses are vulnerable to dramatic, unpredictable, and unaffordable rate increases upon renewal. Effective March 23, 2010, the Department of Insurance, in conjunction with the U.S. Department of Health and Human Services (HHS), will review proposed insurance premiums and put a spotlight on those increases that are considered unreasonable.

Identifying Affordable Coverage Options

Premium Value and Transparency

Beginning September 23, 2010, the ACA required health insurance companies to publish detailed information about the percentage of each premium dollar the company spends on health care (called a “medical loss ratio”). This information will allow small business owners to better compare health insurance plans and identify the best value for their premium dollar. Beginning January 1, 2011, plans sold to small employers that spend less than 80 percent of each premium dollar on health care will be required to rebate excess premiums to their small employer policyholders.

Premium Fairness and Stability

Beginning January 1, 2014, the ACA prohibits health insurance companies from charging higher premiums based on the health status or gender of a small business employee. The ACA also requires health insurance companies to treat all small businesses in a state as members of a single “risk pool,” which will promote greater stability of premium rates.

Marketplace Transparency

Shopping for health insurance can involve the completion of many different applications for different companies resulting in a comparison of different benefit packages. Beginning January 1, 2014, the ACA establishes state-based insurance exchanges that will include baseline coverage packages, standardized forms and transparent insurer comparisons. Initially, small businesses with up to 100 employees will have access to the state-based exchanges.